How Doctors Can Save $60,000 on Disability Insurance

One of the perks of working with a fee-only financial advisor, is we go beyond getting our clients into the right type of disability insurance. We also price shop several different companies along with maximizing all your potential association/employee benefits.  I will cover a few main items you want to look for in a disability policy and lastly, how you can save money by not falling for an insurance trap that you might be currently in!

Disability insurance comes in various forms.  The most important item to look at is the definition the insurance company uses to base whether a claim is accepted or not. Here are the main 2 definitions of being disabled:

1. Own Occupation– where a person is considered disabled if they are no longer able to perform the occupation they had prior to becoming disabled. This is what you want as a doctor or in any specialized field.
2. Any Occupation- where a person is considered disable if they can perform any type of job.This is the worst type of disability insurance.  Picture this, you are not able to work as a doctor, however you could work a fast food job. You would not qualify for disability insurance.  Avoid this type of policy at all costs!

Secondary considerations when choosing a disability insurance policy, would be how much coverage you can have.  Usually it is around 50-60% of your income.  The length of the blackout period, or the time it takes before your disability insurance kicks in.  The most popular is around 90 Days.

Here is the secret about disability insurance that insurance agents do not want you to know about.  Individual policies from major companies are usually expensive, Very Expensive.  For example, a 26-year-old doctor wanting to insure $5500 of income per month would cost over $3200 on an individual policy per year.  This same doctor can save a ton by utilizing an ADA (American Dental Association) group policy or an AMA (American Medical Association) policy.

This is one example of how we work with doctors to make sure they are paying fair premiums for all their insurance.  (We do not sell insurance or receive commissions, we provide the analysis of each financial decision and help our clients implement strategies.)